If the railways department hoped to improve its financial condition by privatising three trains, it must be disappointed now that it is facing up to Rs350 million in losses only after the first year.
The new trains, Pakistan Business Express, Shalimar Express and Night Coach Express, have become increasingly popular among commuters given their punctuality and good service. Their counterparts that are still run by the government are, however, failing to keep up.
According to an official of the Pakistan Railways (PR), the main reason behind the losses is the fare differences between the new trains and the other non-stop locomotives operated by PR. On December 30, 2011, the PR executive committee decided to increase fares, but the notification was not issued until after February 2012, when the private trains had launched.
“Under the revised fares, the government-owned non-stop trains could charge Rs1,440 for the economy class, but the privates ones were paying under the old rates,” said the officer. He claimed that the notification was delayed deliberately to benefit the private companies.
These companies are paying PR around Rs1.5 million per trip, but the fuel is provided by the government, which costs up to Rs1.2 million. Around six to eight, PR employees also hop on the train for each trip. “All the top quality locomotives with Pakistan Railways were given to the private companies and that is why they are on time,” said the official, adding that the private companies are not doing much except sell tickets.
Meanwhile, the railways department denies any losses. According to their public relations director Zubair Ghauri, the three trains are giving a total of Rs6.5 million every day to the government, which is equal to 25 per cent of the total earnings of the 90 passenger trains that PR is running across the country on a daily basis.
“Based on these figures, it cannot be claimed that the private trains are giving any financial losses to the railways,” he said. “Yes, there are chances that some points might have been missed in the agreement that we signed with the private companies, but I can’t comment on them as I don’t have enough knowledge about the agreements.”
The private companies admitted, however, that the revised fares were not applicable to them until they had completed one year, according to the agreement. “PR revised its rates after Shalimar Express was launched so we have no connection with the new rates,” said Rana Rafaqat Ali, one of the partners of the Shalimar Group that runs Shalimar and Night Coach trains.
Meanwhile, a PR official insisted that the fare difference has, however, led to a decline in commuters on PR trains. The newly launched Night Coach Express charges Rs1,200 for its economy class while its PR counterpart charges Rs1,440 between Karachi and Lahore.
“No one is crazy enough to pay more for trains that fail to provide even water and electricity, and don’t even come on time.”
Shalimar Express’ Ali agreed that they have kept their fares lower than PR trains to benefit the commuters.
The company is giving 71 per cent of the revenue from Shalimar to PR, according to the old fares.
Another partner of the Shalimar Group, Malik M Rafiq, the company was paying Rs171,000 per day to the government during its first year, but they have revised their payments and are now paying Rs255,000, he added.
Published in The Express Tribune, March 18th, 2013.